How to keep your business afloat during tough times

You started your business to bring your great ideas, products, and services to the world, but in an unpredictable economy, it can be hard to feel confident about the future. While you can't control everything, you can use financial planning and tax planning strategies to help protect the business you've built.

How inflation, tariffs, and oil shocks are affecting small businesses

For many Canadian small businesses, the last several years have been turbulent, with issues including a pandemic, surging inflation, and supply chain disruptions. Heading into 2026, things seemed like they were getting back to normal. At the end of 2025, the Canadian Federation of Independent Businesses even noted that business owners were feeling somewhat optimistic heading into the new year. But a new set of risks has entered the picture.

U.S. tariffs continue to threaten trading relationships, and geopolitical unrest has led to a surge in oil prices. Ongoing uncertainty and concern about high prices have caused Canadian consumers to pull back on spending. Businesses, for their part, are now having to rethink their hiring and growth plans as they contemplate the potential return of supply chain disruptions, higher costs, and a challenging sales environment.

Why cash flow management matters more than ever

During uncertain times, maintaining positive cash flow in your business can be your first line of defence. This cushion will help you meet your financial obligations, avoid taking on debt, and maybe even invest in further growth.

To stay on top of cash flow, start by:

• Tighten or adjust payment terms: To improve cash flow, consider negotiating extended payment terms with suppliers and quicker payment terms with customers, or automating invoices and payment collection.
• Review expenses: Look for ways to trim variable costs such as subscriptions, marketing, travel, or even office space.
• Renegotiate with suppliers: It may be time to revisit contracts to see if you can negotiate better prices or volume discounts. In some cases, it may be worth shopping around.
• Plan for slow periods: If your business experiences seasonal dips or slowdowns, look for ways to balance out your cash flow. In busier months, consider building a cash reserve in a separate account to cover three to six months of expenses.

Tax planning and tax breaks for small businesses

Tax planning is essential for small businesses. During tough times, it's one of the best ways to ensure you're not leaving money on the table—or setting yourself up for a large, unexpected tax bill.

In Canada, small-business owners are eligible to claim dozens of tax-deductible business expenses. These include common deductions like office supplies, advertising, motor vehicle expenses, salaries, wages, benefits, and work-related travel. They also include lesser-known write-offs like insurance and bad debt. Business owners can also decide how to pay themselves: a salary, a dividend, or a combination of the two, depending on their personal financial and business goals.

Small businesses can also benefit from a range of tax credits and deductions, including:

How to stay adaptable when things keep changing

In an uncertain world, one of the best things you can do as a small-business owner is stay open to new ways of doing business instead of hoping things will go back to normal.

If you're feeling the effects of inflation, tariff threats, or supply chain issues, consider this a chance to revisit your business model and look for new opportunities—whether developing a new product or service that meets another customer need, finding new partners, or reaching out to a target market that hasn't been on your radar.

Flexibility can also look like:

• Diversifying revenue or income sources so you can reduce dependency on one and better withstand market shifts.
• Exploring other ways of doing business—for example, moving into or ramping up your online sales platform and making further investments in technology, such as AI or automation that could help drive efficiencies.
• Adjusting pricing to match competitors or offering tiered pricing or volume discounts to better align with customers' current budgets.

Tools that can help

While you're focused on navigating your business through uncertain times, tools from TurboTax and Intuit can simplify your taxes, helping you file accurately, find tax deductions, and stay tax-compliant. You can file your own return, get expert help along the way, or have us handle your taxes from start to finish.

Quickbooks can help you streamline how you track your income, expenses, and inventory, manage your cash flow, create and send invoices, and more.

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